Fujian VS Guangdong Who Is The Boss Of Sports Shoes Industry?

Analysis of the overall development of sports shoes industry

At present, China's sports shoes industry has formed the upstream manufacturing terminal, the middle industry brand end and downstream sports retailers' complete industrial chain. Upstream manufacturing side leading enterprises have obvious advantages, representing Yuyuan group, the annual output of footwear exceeds 300 million pairs, accounting for 20% of the global sports shoes and casual shoes market. The top two brands in the middle reaches are dominated by international brands, and the market share of domestic brands is decreasing year by year. The downstream sports retailers have formed the tripartite confrontation between Tao Bo, Sheng Dao and sharpness. Meanwhile, some domestic brands also use their own distribution system to sell.

Upstream manufacturing side: leading enterprises have obvious advantages.

The production of sports shoes has the characteristics of labor-intensive and low value-added, plus some brands have some own capacity. The integrated high-quality manufacturers have strong voice, while the profits of small and medium-sized manufacturers are squeezed.

International brands mainly use 100% outsourcing mode. For example, Nike and ADI's sports shoes are produced by Vietnam, China and Indonesia's foundries. Domestic companies such as Anta and 31st degree have started production from the factory, so they have higher self production ability and higher asset ratio. According to the ratio of the production and outsourcing of sports shoes in 2018, the asset ratio of Brand Company is decreasing.

Because of the high technology threshold of sports shoes, upstream manufacturers must have strong R & D capability and integrated production capacity. Therefore, the leading companies in the upstream industry, represented by Yuyuan group, have obvious competitive advantages.

Yuyuan group is the world's largest manufacturer of sports shoes and casual shoes. It is responsible for manufacturing and subcontracting manufacturing and manufacturing for international brands such as Adidas, Asics, Converse, New Balance, Nike, Puma, Reebok, Salmon and Timberland. It is also the only professional shoe manufacturer in the world that can serve several ten international brands at the same time. The annual output of footwear is over 300 million pairs, accounting for 20% of the global sports shoes and casual shoes Market (at wholesale prices).

The company has factories in China, Vietnam, Indonesia, Bangladesh, Kampuchea, Burma and other countries. Business areas are mainly sports shoes, casual / outdoor shoes, multi-purpose shoes, sports sandals, soles and accessories. "Vertical integration and horizontal division of labor" is an important development strategy of the company. Through self-development, investment and acquisition of relevant manufacturers in the industry, to grasp the supply of upstream and downstream materials and key components, so as to further enhance the overall quality, stabilize the source of supply, and successfully integrate the upper, middle and lower reaches of shoemaking to form a complete industrial supply chain.

At the same time, Yuyuan group helps brand customers develop new products, and closely cooperate with brand customers from product prototyping period to provide customers with exclusive product development team and product research and development center. The Group invested considerable resources in research and development every year, including innovative development of shoe and shoe materials, new technology and process development, and Research on raw materials. Yuyuan group's R & D input has greatly improved its production efficiency. The annual per capita output of footwear has increased from 795.3 pairs / person / year in 2014 to 1031.6 pairs / person / year in 2018.

Midstream Market: the world's second largest sports footwear market

According to Euromonitor data, in 2018, the scale of China's sports footwear industry reached 264 billion 760 million yuan, an increase of 19.52% over the same period, and the scale growth rate increased year by year. At present, China's sports shoes and clothing account for 12% of the global total, becoming the second largest market in the world after the United States.

The increase in permeability has brought about a rapid growth in the scale of the industry. In 2014, China's sports shoes and shoes accounted for 7.6% of the total market of footwear and clothing in China, and increased to 10.6% in 2018. This shows that the penetration of sports products in China is continuously improving. The promotion of market penetration is closely related to the growth of local sports brands, the support of national policies and the promotion of sports concepts.

The growth of local brands. The entry of international brands hatched a number of foundries, and gradually formed several major shoe cities such as Zhejiang, Wenzhou, Fujian, Putian and Fujian Jinjiang. In 1989, Lining, a retired gymnast, relied on his excellent brand image and policy support to strike the first sports brand in China. The Jinjiang Department has gradually embarked on the road of its own brand, and has sprang up a large number of companies that understand shoes and clothing, such as Anta (1991), XTEP (2001), and 360 degrees (2003).

The support of national policies improves the participation of the mass movement. In recent years, vigorously promoting the national fitness program has been included in the national strategic level, and is committed to promoting the healthy development of the domestic sports industry. In October 2014, the State Council issued several opinions on speeding up the development of sports industry to promote sports consumption, opening the curtain of promoting the sports industry's high-speed and deepening development. It is regarded as a landmark document of the domestic sports industry. Since then, a series of guiding documents aimed at strengthening the awareness of national fitness have been promulgated. At the end of 2017, the State General Administration of sport issued the guide to fitness for all, explaining the body movements, parts and functions in detail. Thanks to the improvement of health awareness and the improvement of sports facilities, people's participation in sports has increased significantly in recent years, and the demand for sports shoes and clothing has also greatly increased.

The promotion of sports concept promotes the development of the industry. Health has become the new wealth of the people nowadays, and the participation of the whole people in body-building (fast walking, jogging, and even square dance) has become a trend. Sportswear is gradually becoming a habit of life, becoming a rigid demand for consumers. Its consumption target is extensive, covering groups of different sex, age and income level.

The share of local brands decreased year by year. From the perspective of market share, brand Adidas and Nike have ranked the top two in China's sports footwear industry, and the market share of foreign brands has risen from 25.7% in 2010 to 54.3% in 2018. The market share of local brands decreased year by year, with a market share of 49.2% in 2010 and only 28.6% in 2018.

Downstream sports retailers: Tao Bo, Sheng Dao, sharp three pillars.

The downstream market sales of sports shoes are mainly divided into two forms. Domestic brands are sold through their retail and affiliate systems, while international brands are usually sold by large agents. Agents usually have extensive marketing channels and sophisticated terminal management capabilities.

The characteristics of the domestic brand marketing system lie in a certain closeness, that is, the stores are mostly single brand stores, and franchisees are also dominated by exclusive agents. The sales system of domestic brands usually includes three modes: offline, franchise and electronic business (mostly direct operation mode). With the growth of local brands, the closed sales system is more convenient for local brands to control the terminal. Anta is the first sporting goods company to complete the wholesale mode to retail oriented mode transformation. With Anta and Lining as the representative, after the transformation of wholesale mode to retail orientation, the sales system is more mature.

International brands are usually represented by large retailers in China. The large sports retail platform has obvious advantages in cooperation with international brands and channel layout. To increase brand coverage, an international brand usually collaborate with different agents. Similarly, large-scale integrated sports platforms will also use their scale advantages to represent multiple brands.

The business models of large retail agents include three parts: brand cooperation, channel layout and retail management. Agents provide sales services to many international brands through a wide range of direct store networks, and create interactive communities of consumers and enhance interactive experience for brands.

In China, the main sports shoe agents have a lot of international, winning and sharp. Among them, Tao Bo runs the sports retail and service platform with consumption as the core. It is the largest sports shoe retailer in China in 2018, accounting for 15.9% of the market share. It is also the largest retail partner of Nike and Adidas in China. The two brands of Nike and Adidas also contributed 90% of the business revenue of Tao Bo international.

Tao Bo can become China's largest sports shoe agent, because it has close customer relations, a wide range of sales channels and high level of channel marketing and customer management capabilities.

Close customer relationship. Since 90s, Tao Bo has been involved in the management of sports products. Since 2000, new channels have been tried to enrich the brand portfolio, and since 2010, we have expanded to outdoor and sports fashion categories, and gradually explored and developed the multi brand brand store business mode. The company has worked with Nike for 20 years and is currently the second largest retail partner and customer in the world. At the same time, the company is Adidas's largest retail partner and customer in the world, and has established a strategic partnership of up to 15 years. Over the years, Tao Bo has contributed to the expansion of the two brands in China, making it the best selling international brand in China's sports shoes market.

Wide sales channels. The company's national direct store network is the most valuable asset. According to the number of prospectus listed by Tao Bo international, by the end of September 26, 2019, the company's retail network was spread over 268 cities, covering 30 provinces in China, with 8372 direct outlets and 1957 stores operated by downstream retailers. The company's direct store attracts more than two million customers every day, and has continuous, extensive and direct interaction with consumers all over China.

Companies continue to open new stores and expand the depth and breadth of the sales network. In the 2016-2018 fiscal year, the total sales area increased by 13%, 11.4% and 9.3% respectively. In order to provide a better shopping experience, the company's large stores usually have more modular products and higher staffing level. Such stores have higher single store sales in all stores. Although the company closes inefficient stores every year, the size of new stores is generally larger than that of closed stores. In addition, the company also optimizes the network structure by upgrading the stores with high sales potential, and it also invests in the interior decoration and display of existing stores to increase the attractiveness to consumers.

High level of channel marketing and customer management capabilities. In May 2018, the company adjusted the "TopFans" membership plan and reintroduced it. It wanted members to provide a wide range of benefits in terms of products, services and activities. The company provides additional services to members, including free professional shoes maintenance service and free courier service for sports shoes and clothing products. In addition, the company uses affiliate programs to link members of the company to various types of platform partners and provide them with plenty of sports and social activities. As of September 26, 2019, the company had 22 million registered members. The launch of the membership plan has also contributed significantly to the company's revenue growth, and has contributed more and more. As of August 31, 2018, November 30th and February 28, 2019 and May 31st, members contributed 36.6%, 41.5%, 52.3% and 70.8% of the total sales volume (including VAT), respectively.

　　 Comparative analysis of regional development of sports shoes industry

Development of sports industry in different provinces

Guangdong, Fujian and Jiangsu are the top three.

The operation of sports industry can provide a great environment for the development of sports shoes industry. From the scale of sports industry, as of November 14, 2019, 11 provinces, Statistics Bureau, Sports Bureau and other related units announced the total scale and related data of sports industry in 2017. Among the provinces that have already published data, Guangdong ranked first in the province. The annual output value of the sports industry is 399 billion 803 million yuan. The second place is Fujian Province, with an output value of 380 billion 141 million yuan, and Jiangsu province ranks third at 358 billion 564 million yuan.

In 2017, the total scale of the national sports industry was 2 trillion and 200 billion yuan, and the total scale of the sports industry in 11 provinces, which has already released data, is 1 trillion and 998 billion 945 million yuan, accounting for 90.86% of the total scale of the national sports industry, with an added value of 667 billion 514 million yuan, accounting for 85.46% of the national sports industry's added value. It can be seen that the development of sports industry in China is not balanced.

　　 Fujian sports industry added value to the top

Judging from the added value of sports industry, the added value of the national sports industry in 2017 was 781 billion 100 million yuan, of which Fujian ranked 132 billion 400 million in the first place, accounting for 16.95% of the national sports industry added value; Guangdong province ranked second with the added value of 132 billion 186 million yuan, accounting for 16.92% of the total value added of the national sports industry. Among the 9 provinces that announced the added value of sports industry in 2017, 7 provinces are located in the eastern and southern coastal areas, and the central Henan and Hunan provinces are also at a relatively high level.

Jiangsu achieves the highest target completion rate.

In October 2014, the State Council issued several opinions on accelerating sports industry to promote sports consumption. After the publication of the "opinions", provinces and municipalities have issued opinions on accelerating the development of sports industry and promoting the implementation of sports consumption in provinces and municipalities, and set the development goals in 2025 as nodes. In the 11 provinces and cities that released the total scale of sports industry in 2017, the total target of sports industry in Fujian province was the highest in 2025, and it was 10000 billion yuan. In 2017, Fujian province had achieved 38.01% of its target. In 11 provinces and municipalities, Jiangsu achieved the highest degree in order to reach 49.8% of the target. Among them, Jiangsu, Liaoning and Guangdong provinces exceed 44% of the whole country.

Policy introduction: Fujian sports shoes industry supporting policy more

　　 Industry policy of Fujian Province

According to incomplete statistics, there are 12 policies on sports shoes industry released by Fujian Province in 2012-2019 years. In 2019, in order to implement the opinions of the CPC Fujian Provincial Committee on carrying out the important instructions of general secretary Xi Jinping and persisting in the idea of "catching up with high quality development and implementation" and speeding up the promotion of the high quality development of the sports industry, the Fujian Sports Bureau issued the "Fujian province's measures to promote the high quality development of the sports industry". According to the measures, the added value of sports industry will reach 300 billion yuan by 2025. In order to achieve the above goals, Fujian Sports Bureau focuses on promoting the transformation and upgrading of sporting goods manufacturing industry, speeding up the development of the whole industry chain of sports service industry, and optimizing the development environment of sports industry, and puts forward 7 measures and 22 measures to promote the high quality development of the sports industry in 7 aspects. In terms of promoting the transformation and upgrading of the sporting goods manufacturing industry, this paper mainly puts forward 4 measures: accelerating the development of intelligent manufacturing, strengthening sports science and technology innovation, promoting the development mode of "manufacturing + services", and accelerating the development of sports industry cluster.

Industry policy of Guangdong Province

According to incomplete statistics, there are 9 related policies on sports shoes industry in Guangdong Province in the past 2014-2019 years. Since 2014, in order to promote the development of sports industry, Guangdong has successively introduced a number of supporting policies, including the implementation opinions on accelerating the development of sports industry to promote sports consumption, the "13th Five-Year plan" for the development of sports in Guangdong Province, and the 13th Five-Year plan for mass sports in Guangdong Province.

In 2019, in order to integrate the industrial innovation resources, promote the deep cooperation of the footwear industry chain in Tai Wan District, and promote the new advantages of Guangdong footwear industry to form innovative cooperation, Guangdong footwear manufacturers set up the Guangdong footwear innovation alliance of Guangdong Bay and Macao Bay, leading the innovation and upgrading of Guangdong footwear industry.

The development of enterprises: Fujian monopolized the domestic sports shoes brand market, and Guangdong was mostly a substitute factory.

Most of the domestic sports brands in China are from Jinjiang, Fujian. Such as Anta, XTEP and 31st degree. Judging from the competition pattern, China's sports footwear industry has a high degree of concentration. According to Euromonitor data, in 2010-2018 years, the CR5 of China's sports footwear industry increased from 44.7% to 57.3%, CR10 increased from 65.2% to 71.6%, and the industry concentration in the future is expected to continue to improve.

Fujian: has the most famous brand of sports shoes in the country.

Fujian has Quanzhou, Putian sports shoes and clothing industrial clusters and sports footwear industry clusters such as Jinjiang. Among the top ten brands in the Chinese market, there are five domestic brands, four of which are from Fujian, namely, Anta, XTEP, 31st degree and Jordan.

Among them, the development of sports industry in Jinjiang is more prominent. Judging from the country's county level, the number of listed enterprises in Jinjiang sports industry ranks first in the country (21), and the number of national sports goods brands ranks first in the country (42), and the total number of sports industry enterprises ranks first in the country (10078).

According to the "50 most valuable clothing brands in the world" released by Brand Finance in 2019, Anta ranked twenty-first, surpassing Puma (twenty-fourth place) in one go, and becoming the third place in the global sports brand after Nike and Adidas. It is also the only Chinese clothing brand selected.

Guangdong: the world's brand production base, but most of the factories have been transferred.

The footwear industry in Guangdong is mainly concentrated in Dongguan. Dongguan has many brands in the world. Most of the sports shoes brands such as Nike, Adidas, Reebok, Puma and so on are produced by Dongguan shoe making enterprises. Among them, Dongguan Yuyuan shoes factory is part of the world's largest sports shoe manufacturer Taiwan Baocheng group, which is the more than 60 global brand of Nike, Adidas, Reebok, new brun and Puma. In 2017, the output value of sporting goods and manufacturing industry in Guangdong reached 273 billion 680 million yuan, with an added value of 56 billion 386 million yuan.

But in recent years, due to the rapid development of Dongguan's economy. Dongguan's largest sports shoe manufacturer in the world, Yuyuan group, and big group, Shun Tian Group and many other popular Taiwanese shoe makers have shifted their factories from Dongguan. From the point of view of transfer, on the one hand, it is transferred to areas with lower wages per capita in inland China and Hunan. On the other hand, it has been transferred to Southeast Asian countries such as Burma, Vietnam and Indonesia.

From the average annual salary of employees, the average annual wage of workers increased from 10% in 2010 to 58738 in 2018 from 2010 to 2018, and 5 times the average wage in ten years. It can be seen that the increase of labor cost has great influence on the cost of shoemaking enterprises.

Judging from the output of Vietnam's boots this year, the national output in 2013 has achieved a rapid growth. In 2012, the output was only 53 million 600 thousand pairs, and the output reached 25 million 610 thousand pairs in 2017, an increase of 377.80% over the same period last year. After 2013, the annual output of Vietnamese footwear remained above 25 million.

From the perspective of footwear exports in Dongguan, the overall trend of 2010-2018 years is decreasing. In 2010, the export volume of footwear in Dongguan was 20 billion 590 million yuan, while the export volume in 2018 was only 16 billion 339 million yuan.

Sales channels: Guangdong has the most extensive sales channels.

From the distribution of Nike, Adidas, Lining, Anta and 331 degree stores and counters, the total number of 5 brand stores and counters in Guangdong reaches a maximum of 4058, and the number of stores and counters in Fujian is less than 1/3 of that in Guangdong.

The number of stores in different provinces is related to the demand of local sports shoes, and the demand is determined by the development of sports industry and the level of per capita consumption. The scale of sports industry in Guangdong ranks first in the country. From the perspective of per capita consumption expenditure, Guangdong ranked 13884 in the country, ranked fifth in the country, ranked behind Zhejiang (15732 yuan), and Fujian ranked 12521 in the whole country seventh. Guangdong's industrial scale and per capita consumption level determine its demand for sports shoes market.

Perspective: Guangdong sports industry is developing better, but Fujian is the king of China's sports shoes industry.

Judging from the scale of the sports industry, Guangdong ranked first in terms of 399 billion 803 million yuan, ranking second in Fujian Province, and 380 billion 141 million yuan in output value; Jiangsu ranked third in 358 billion 564 million yuan.

Judging from the added value of sports industry, Fujian ranked first in 132 billion 400 million yuan, accounting for 16.95% of the added value of the national sports industry. Guangdong ranked second with the added value of 132 billion 186 million yuan, accounting for 16.92% of the total value added of the national sports industry.

Judging from the completion target of sports industry development, Guangdong is ahead of Fujian (38.01%) by 44.42%.

From the policy point of view, 2014-2019 years, Fujian Province promulgated 12 industry related policies ahead of Guangdong province.

From the perspective of enterprise development, Fujian has the most famous brand of sports shoes in the country.

From the perspective of sales channels, the number of major sports shoes brands in Guangdong is the largest and the demand market in Guangdong is bigger.

To sum up, the sports industry in Guangdong is developing better, but Fujian is the king of China's sports shoes industry.